DESCRIPTION: The long-term care of older persons with dementia is a major concern of providers and policymakers. Approximately 750,000 persons with dementia in the United States reside in nursing homes, and more than 800,000 new cases enter these facilities each year. The cost of caring for persons with dementia who reside in nursing homes has received only limited research attention, despite the fact that the aggregate cost of caring for this group is estimated to be as high as $120 billion annually. The aims of the proposed continuation study are to: 1) determine the temporal patterns (up to six years) of direct medical care costs and utilization of demented v. non-demented persons admitted to nursing homes for the first time; 2) compare the direct medical care costs and utilization of these demented v. non-demented persons at different levels of functioning and comorbid status; 3) evaluate the variability in costs and utilization for demented v. non-demented new admissions by characteristics of the nursing home; and 4) assess the sensitivity of a diagnosis of dementia using secondary records to determine whether associations observed in Aims 1-2 are robust to alternative definitions of dementia. These aims will be addressed by linking Medicare and Medicaid claims data for up to six years following admission to data from the current study, "The Epidemiology of Dementia in Aged Nursing Home Admissions," (R0l AGOS21 1) in which 2,285 new admissions to a representative sample of 59 nursing homes in Maryland, 1992-1995, were enrolled and evaluated for the presence of dementia by an expert clinical panel of neurologists, psychiatrists, and a geriatrician. These new admissions were similar in demographic, functional, and comorbid status to nursing home admissions elsewhere in the U.S. during the same period. Cost and utilization rates defined by type of service, procedures, sites of care, and payor (Medicare/Medicaid) will be expressed in per person month terms, and longitudinal Poisson regression models will be used to estimate these rates and examine their association with individual (e.g., dementia diagnosis, function, comorbidity) and environmental (e.g., structure and process of care) characteristics. With changes in reimbursement for those in nursing homes and the increasing demand to care for persons with dementia in nursing homes and other settings, policymakers need to have information on cost to optimize care for this growing segment of the long-term care population.